Hyundai India plans to produce top end portfolio cars locally to save on taxes

Wednesday 14 December 2011, 11:35 AM by Vikas Yogi

Hyundai Motors India Limited (HMIL), the largest car exporter and second largest car maker in the Indian auto market, is mulling over the option of locally manufacturing costlier cars in its India portfolio. The company, which has a stronghold in the volume driven small car segment, is planning to use more than 90 percent of local content in the manufacturing of top end Hyundai India portfolio cars like Sports utility vehicle Santa Fe and premium sedan Hyundai Sonata Transform at its manufacturing facility in Chennai.

By producing these high end models locally, the company is looking forward to save on import duties, as the weakening rupee has made company’s imports from South Korean market substantially expensive.

Hyundai India plans to produce top end portfolio cars locally to save on taxes |
Hyundai Santa Fe

Speaking on the matter, Arvind Saxena, director (marketing and sales), Hyundai Motor India, said, “We have already started complete manufacturing of the Santa Fe in India from August this year.” He added that as a result, company has been averaging 225-250 units of the Santa Fe every month. This will be the company’s focus area in the future, too.

Despite producing Santa Fe model locally, the company still imports a number of components from its base market South Korea for this vehicle. The sharp fall in the value of rupee against the South Korean currency has made the import of these components highly expensive.

Moreover, the company is eying to produce a new version of its popular sedan Sonata Transform locally. The car will be launched in the Indian market next year. Mr. Saxena said, “If we want to sell this car, we will have to produce it locally to bring down its cost. As a result, we will be doing the complete manufacturing here in India.”

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